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JAFO: Thank you so much for the links. Very helpful.

But then I started to think of the tax consequences of an exit strategy and it doesn't make any sense at all to pursue this.

If the corporation is eventually sold (preferred exit strategy), the IRA will then be paid per the shares in the C corporation owned and perhaps in a lump sum. Which puts the money back where it can't be accessed until retirement, within the IRA or rolled into a new IRA.

The last time I financed a startup, we borrowed money from the wife's 401K, and after 6 years I sold the company for a huge return (paid back the 401K loan after 3 years). And the money from the sale was all capital gains, taxed at a very favorable rate.

If I followed the scheme above, the returns would be taxed at whatever rate I'd pay on withdrawal from the IRA, and presumably at a much higher rate.

Steve
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